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look at data and analysis and get away from some of the litany of documents and lock step is a good thing. a lot of this early on in the programs is time consuming, it's a lot of paperwork, it's a need to meet review requirements. and the intent is certainly the right one. we need to figure out what we need before we develop it. but something's not working here. and i wondered if you could talk about this. do you think some of these efforts are significant enough? and what would you do to ensure that real change occurs? >> now, i completely agree that the status quo is unacceptable and the system itself does require reform. and as you know, the undersecretary of defense for acquisition as carter is working diligently based on some of the guidance we've received from the congress of the united states. i think there are some answers, actually. i think the service chiefs need to have -- to have a greater role throughout the process.
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right now we tend to have a role, but then the process is handed over to find a material solution. i think we have to partner more closely throughout the process from start to finish with industry. and i think we -- i think we need to take a shorter time horizon on acquisitions. the way requirements creep is when we have decade-long programs which allow it to remain open, and for guys like me to keep stuffing things through. i think the answer is greater collaboration between requirements, determination, materials, solution, greater collaboration with industry earlier, and shorter time horizons as a start, but there's probably other opportunities, as well. >> i think we're going to be forced to make some of those decisions. by the way, you said ask carter is looking at some of these issues. i can't help myself, mr. chairman, say that some of the guidance i think it's fair to
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say from congress on the second engine is not being adhered to. and that is, we want competition. >> i had more in mind. the weapons system reform act. >> i know. i just think we've got to go to competition wherever possible, get the costs down, and be sure it's open and fair. financial management. i want to get your thoughts on this. we recently had a debate on this on the floor of the house because the senate chose not to have so many positions be confirmed through the normal process, which is a good thing, streamlining it. and i offered an amendment and support it by many in this committee saying there's some folks in the federal government who ought to continue to go through a process because we want to give them the stature that comes with that and that included the financial manager officials in the department, including the controller. and we were successful in getting that done. and the reason we did it again was to be sure that those folks are listened to by others who are confirmed. and those who are in the
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civilian leadership are usually who we talk about this issue to. i would think the auditing function to ensure you have financial officers in every service who are getting the attention from the leadership is extremely important. and i would hope that the uniform leadership would continue to play a role. in fact, i would say even a more active role. some would view those as not important. i would say in these times, it's incredibly important. the marine corps recently showed this, i think, by focusing more on financial management. they claim a $3 rate of return for every dollar spent on financial management, for instance. as one member, i will tell you, i would hope that you personally will get engaged in this issue with increasing pressure on the pentagon's budget. we're freeing up funds for critical needs by focusing on financial management. can you give me your quick thoughts on that as a service
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chief now? and how you intend to approach this as chairman? >> as a service chief, i absolutely concur that -- we describe them as em deps. the long tail -- actually it's 17% of the emdeps have about 15% of the challenges. that's where we tend to focus our sights. but there's another 50% out there that total $3 million, $4 million, $5 million and we're in one of those environments where we've got to be paying attention to all of it. as you know, we're on path to become auditable by 2015. >> thank you for your willingness to step forward. >>female speaker thank you very much. senator portman?
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i would recommend to you relative to the issue of contracting in afghanistan a report, which was a major report of this committee in october of 2010 entitled inquiry into the role and oversight of private security contractors in afghanistan. it was a long investigation, a detailed investigation, a very disturbing investigation about the shortfalls of our private security contractors and the regulations and the policies needed to governor their operations. so the article we saw in the paper the other day about some of the funds ending up in the hands of our enemy. was based on that investigation made references, as a matter of fact, to the investigation. but in terms of trying to put an end to some of the ways it is going on relative to contractors in afghanistan, i would
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recommend that very detailed report that we all worked so hard on. and i was intrigued by your comment about how much personal pleasure you take from not being a lawyer, but i will not pursue that, being a lawyer. and since i'm interested in your rapid confirmation -- and unless there are any additional questions from senator portman, we will with thanks to you and your bride stand adjourned. and thank you, and we will seek a very rapid vote of this committee and hope for confirmation. >> thank you, senator.
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general counsel matthew olson has been nominated to head the national counterterrorism center. at the senate intelligence committee confirmation hearing, she talked about counterterrorism strategy and the guantanamo bay detainee's. the national counterterrorism center was created in 2004 and is charged with sifting through intelligence information to identify terrorist threats. this is an hour and 45 minutes.
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>> this hearing will come to order. the process will be as follows, the vice chairman will make some remarks. we will then call on the distinguished senator from north dakota for remarks, and then we will proceed. i trust that is agreeable with everybody. the committee meets today to consider the president's nomination of matt olsen to be the director of the national counterterrorism center. mr. olsen is currently the general counsel of the national security agency, and he sold a number of senior positions in the department of justice, including the national security division and the federal bureau of investigation. mr. olsen has appeared as a witness before this committee previously and as frequently briefed members and staff over the last several years. i'd like to welcome him back to this committee to read like to begin today by discussing the current terrorist threat and the
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role of what we call nctc, which mr. olsen will be leading if confirmed. the nctc is the central agency within the united states government dealing with the identification, prevention, disruption, and analysis of terrorist threats. it's very important. while it is best known for its role in consolidating and analyzing terrorism related intelligence, it also plays an important role in conducting strategic planning for counterterrorism actions across our government. the nctc grew significantly in size, capability and maturity under the previous director, michael liter. its success and those of the broader counterterrorism community include numerous terrorist plots that were thwarted both here at home and abroad.
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nctc has also achieved less noticed but equally important advances in the sharing of threat information across the intelligence community. a streamlining if you will of intelligence, and improved watch listing capability and greatly improved analytical capabilities. despite the improvements in the reforms, especially in response to the findings of the recommendations of this committee and others on the christmas day attempted attack by umar farouk abdulmutallab. i am still very concerned about the possibility of terrorist attacks against the united states. i believe this is a very critical time. the period leading up to the tenth anniversary of 9/11 is a period of heightened threat. despite counterterrorism pressure against pakistan including the successful strike
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against osama bin laden the growth remains dangerous and vengeful. at the same time the threat from al qaeda's affiliate's and adherents around the world has increased and presents particular challenges. i am especially concerned about the threat to the united states homeland from al qaeda in the air arabian peninsula, aqap as we cut, as well as terrorist safe havens in somalia and elsewhere. this means, at least to me, that this is a crucial time for our counterterrorism establishment to be at full strength and not to be without the leader. nctc is a linchpin of this establishment. so i treat least the president has moved quickly to nominate mr. olsen, an individual serving in a senior intelligence community position today to take the helm of this organization.
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let me take just a moment to read the first paragraph from a letter of support from mr. olsen's nomination written by general keith alexander, that richter of the national security agency. this is a quote. "i am writing to wholeheartedly endorse the nomination of matthew olsen to be the next director of the nctc. matt has served as a national security agency general counsel for the past year and has shown true leadership outstanding judgment and decision making ability. he's been a key part of the agency's effort to provide intelligence that allows our government to counter terrorist threats. in my opinion, matt is superbly qualified to hold this critical intelligence community position, end of quote.
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before his current position at the nsa, mr. olsen served in the department of justice for 18 years including 12 years as a federal prosecutor. in a letter of support for mr. olsen's nomination, former attorney general michael mukasey wrote of mr. olsen, and i quote, he was not only an excellent lawyer and manager, but also an exemplary person in dealing with his colleagues. matt has an abundance, every personal and professional quality and skill you could hope to find any nominee to head the nctc. his nomination has my unqualified support. and finally, there is a letter from mike mcconnell, in which he also offers his strongest possible support. as a 44 year veteran serving the nation as a member of the intelligence community, i have
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many opportunities to work with professionals of the department of justice. this was particularly true when serving as the director of national security and as the director of the national intelligence. during those years of service i never met or served with a more accomplished or dedicated professional than matt olsen. he understands the icy, its process and procedure and has served with distinction to read well, i can go on and on and i have many pages here. i'm not going to do it. suffice it to say i believe that we have an extraordinarily qualified professional, which can step into the leadership of nctc, and at this very potentially balk period provided with the leadership, it really does deserve a marriage. so, with that, mr. vice
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chairman, may i ask you to meet your remarks? >> thank you madame churn. mr. olsen, congratulations on being nominated to be the director of the national counterterrorism center. thank you for your service to the country especially in its demanding roles over the last several years. i also welcome your family and thank them for their great support to you and to the country. we appreciate that very much. i also want to just say a special word of thank future michael liter that you were going to be seceding. i talked about this the other day, you and i are great friends, you know the leadership he's provided in some very difficult circumstances. and while we have still had some growing pains at nctc, mike has brought us through some very tough times, and has kind of right and the ship in times it's headed in the wrong direction and i am very appreciative of mike's leadership and service.
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mr. olson commodore nomination comes at a critical point in history to fight terrorism. while we have made considerable progress against al qaeda and the fata, we face growing threats as al qaeda continues to spread. in my view, aqap poses the biggest threat and i urge you to make dismantling that were pure primary focus before the strike us successfully cured at home. the past spring brought immense changes to the middle east but it remains unclear what effect this might have on our long term counterterrorism efforts. this on certainty is further complicated by our own the current fiscal condition where the resource constraints were no devotee impacting the national defence and counterterrorism enterprise. a mixed these threats it is critical to the national security that the ncbc perform its mission. you and i talked about some of the feelings leading up to the christmas bombing attempt. especially the ncbc's an ability to connect the dots.
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while there has been much progress, a lot of work remains including on the information sharing and the detainee and data retention. where there's an attack on the imminent threat like 12, 25 or times square committee will often be the first point of contact with this committee. we would expect your and garnished judgments to the facts and frank assessments. in the past efforts to control the message for political purposes have resulted in the congress being given little or inaccurate information. that's not pointing a figure of this administration. it's happened in other administrations. as the nctc director, you will be expected to be forthright with this committee, and to push back on any effort to keep information from us. along these same lines, i have shared with you some of my concerns about the recommendations made by the guantanamo review task force, which you directed.
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it disturbs me that under your leadership, detainees were transferred or recommended for transfer through yemen for about 2,009, even as the intelligence community warned the administration about this security situation there. we already knew that the former gitmo detainees were in the aqap leadership in yemen, but it was only after aqap's failed christmas day attack that the transfer stopped. in my mind, this was an unacceptable risk for us to take. he mentioned in my office the question on the task force in part because you were guided by the executive order on closing gitmo. i suspect that the one-year deadline for closing gitmo affected task force analysis and decisions. when the only original two options for each detainee for the prosecution or transfer, it seems like there would have been significant pressure to lean towards transfer. i wonder if this explains why, after the initial task force
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review, found 92 detainee's suitable for transfer to my second review came up with 40 more transferable detainee's, and another 40 for conditional detention, which at the time was essentially delete transferred. congressman frank wolf of virginia who has expressed similar concerns about the transfer decisions in a letter to the kennedy and some of the interactions he had with you regarding the potential transfer of uighurs into the united states. i am concerned a member of congress thinks that he has been misled. so i think it would be helpful if you explain your interactions with congressman wolf, and you and i talked about this and i want to give you the full opportunity to do that this morning. i urge you to be as forthcoming and direct about this including information provided to or with the help from congress on this issue. ironically in your new position, one of your jobs will be tracking former detainees who have read engaged, including
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some recommended for transfer by the task force. i urge you to take a fresh look at any intelligence on gitmo detainee's. given the threat from aqap and a recidivism rate right now over 26%, we are in no position to let any more dangerous detainee's go. unfortunately, the drive to close gitmo has had the immediate and the negative impact of leaving us with few options to detain terrorists outside of afghanistan. as we draw down in afghanistan, we will even lose that option. i'm sure you have seen noting that the united states may be killing terrorists, but we are not trying very hard to capture them. most because gitmo has been taken off the table. capturing and interrogating terrorists remains one of the best ways to get actionable intelligence and prevent future threats. again, mr. olsen, i congratulate you on your nomination, and these issues need to be lean on the table and need to be fleshed
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out because the direct form of contact with this committee is going to be you in so many instances, and we need to certainly have that feeling of trust that we have developed and need to develop stronger over the coming years while you are in this position. so thank you, madam chair. >> thank you mr. vice chairman. now i would like to recognize the distinguished senator from north dakota, chairman of the budget committee and the democratic side, kent conrad. >> mr. chairman, welcome. >> thank you, chairman feinstein. thank you, vice chairman chambliss, senator coats, good to see you in senator wyden, senator udall come senator warner. i'm delighted to be to introduce matt olsen. his parents are from north dakota, people live in a very long time. matt's roots are deep in north dakota. he returns every chance he gets
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with his family, his wife and his children, elderly come and meet and will come his sister, susan, is with us as well. as i said, i've known this family for a very long time coming and they are the best that it gets. his father was the chief of staff to the man the white defeated for the united states senate. and so i know how good he really is. van passed away three years ago, but i know he's looking down with a twinkle in his eye today proud of matte and all that he has accomplished. you know, after defeating the boss for the united states senate, i came here with some trepidation of what my relationship might be like with a van and his wife, the treated me with the greatest courtesy over time the cancer indifference.
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the highest quality people that our state has to offer, and i believe that the highest quality of people in the country. these are the americans through and through. you're father would be so proud of you at this moment. he would be looking down and saying he has done good. and indeed, you have. users your country with a distinction the justice department, the fbi and national security agency where you are currently the general counsel. you're public service has spent three presidential administrations. that is a notable and impressive accomplishment and speaks volumes about your competency and professionalism. colleagues, matt has already accomplished so much. and now the president has asked him to assume one of the most important and demanding jobs in the intelligence community. the director of the national counterterrorism center.
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we all know that the nctc's mention is vital to combat terrorism at home and abroad by analyzing the threat, sharing the information with our partners and integrating all instruments of national power to ensure unity of effort. there is no doubt in my mind that matt has the experience and the character to lead the nctc. but don't just take my word for it. admiral mike mcconnell served as the director of national intelligence and president bush's administration and director of the nsa and the clinton administration. here's what the admiral mcconnell had to say. and i quote. having known and worked with mr. olsen for over four years, i have observed him to be the utmost professional, dedicated to the security of the nation. he understands the intelligence community in the law and the process needed to keep us safe.
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he has great respect for the law, our values and the activities needed to ensure the safety of the nation. i have every confidence that if confirmed, mr. olsen will serve the nation, the congress, the administration, and the intelligence community at the highest level of service and performance. colleagues, matt is smart, honest, and he is a true professional and absolute patriots. i can't put it much better than admiral mcconnell. i hope very much this committee will move quickly on his confirmation and our colleagues in the senate will follow suit. it is really my honor to be here with matt olsen. >> thank you very much mr. chairman. appreciate the remarks. i know you have a busy day. much is happening. so feel free to stay or leave,
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whichever you wish. >> thank you. thank you very much. mr. olsen, we will now turn to you. part of your remarks senator conrad did this to some extent, but perhaps he would go able further and even ask them to stand up. >> thank you very much, madam chairman and vice-chairman chambliss. i want to thank ev committee for taking the time to consider my nomination this morning. i especially want to thank senator conrad for that very warm and personal introduction. i really appreciate that, and i am grateful to the many members of the committee that i've had the opportunity over the last two weeks to meet and have conversations with. i really appreciate the thoughtful consideration the committee has given to my nomination. at the outset, i want to thank the president for having the confidence to nominate me for this position and director of
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national intelligence for supporting me. i am tremendously honored and humbled to be considered for this position. let me also if i may take a moment to express my condolences to the people of norway in the aftermath of the tragic attacks in oslo last week. my grandfather immigrated to north dakota from norway at the age of 16. i have extended family that lives in oslo. i think that these heartbreaking events serve as a reminder to all of us of the importance of working together in the international community to prevent these sorts of fact that terror. i appreciate very much, madam chairman of the opportunity to introduce my family. i sit here today before you because of the support of my family and my friends and my colleagues many of whom are here today. my wife is directly behind me. my children, my daughter elizabeth, my oldest son, nate, my youngest son, will are all here with me. i especially want to acknowledge
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my mother, merna sitting here on the end, my father, van who is warmly remembered and senator conrad's remarks along with their love and guidance my parents, my mother and father have provided, my sister susan and jennifer, with an example of how to live like beef with honor and integrity and devotion to others and i couldn't be more grateful for them being here today. >> madam chairman and members of the committee, today as we approach the tenth anniversary of al qaeda's attacks on september 11th, it is appropriate to reflect on that day that the nation suffered the single most devastating attacks in the nation's history. it was in the aftermath of that attack on that date that the congress established the national counterterrorism center. nctc is the primary organization
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and the federal government for analyzing, integrating and sharing all source intelligence information pertaining to terrorism and counterterrorism. in my view, no other organization is as singularly focused on preventing acts of terrorism. a decade after the september 11 attacks, we remain at war with al qaeda and its affiliate's triet thanks to the leaders of this committee and congress and thanks to the work of thousands of dedicated men and women in the intelligence committee including as well as our men and women in uniform across the globe, al qaeda has weakened. at the same time al qaeda and its and gerrans are around the world as well as other terrorist organizations continue to post a very significant threat to our country. confronting this threat and working with focus and resolve to prevent a terrorist attack is nctc's mission first and
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foremost. to fulfill the responsibility nctc brings together the wide an array of dedicated and talented professionals, this diverse work force is in my view the greatest asset. in addition, nctc embodies the principle that we all must serve as one team to protect the nation. we must work colavita fi and use every element of the national power to bring a relentless and focused pressure against al qaeda and its adherents as well as other terrorist network some of the globe. i have been privileged to serve as a number of comments made this morning in the leadership positions ticket to the national security during my almost 20 years of a career, government service. as a general counsel of the national security agency i have guided and supported nsa intelligence operations and has ensured that the agency's
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activities adhere to the constitution and the laws that govern. -- government's activities and protect liberty and privacy of americans. at the fbi, i was privileged to serve as counsel to director mueller and to a world-class intelligence organization focused on preventing and disrupting potential terrorist plots. as a career official in the department of justice to closely have this committee and in the congress of stand the new national security division of justice and manage the implementation of the landmark changes to the intelligence surveillance act the congress passed in 2008. i also supervised at the guantanamo task force bringing together the national security professionals from across the government to compile a and analyze intelligence information on detainee's. finally, i served for about ten years in the district of columbia as a federal prosecutor. in that role i learned the value
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of working as a team with investigators and operators and i learned the fundamentals importance of finding and following the fact wherever they lead. if i'm honored to be confirmed to this position, i can assure you i am committed to forging a strong and cooperative relationship with congress. i believe that based on the years of experience in the career of the government official the congressional oversight is essential to nctc and the conduct of intelligence activities. members of congress and particularly of this committee were in a little perspective to the difficult issues the intelligence committee faces. the role of congress is critical to building the trust of the american people in nctc and the community. if confirmed, i commit to providing full and timely communications and transparency with the congressional oversight committees. in ctc's mission is to protect the nation from the terrorist
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attack we must pursue this mission with vigilance and resolve. if confirmed, i pledge to do my very best to err in your trust and to get this effort while. adam julca of oyster, thank you very much for the honor of appearing before you. >> thank you for a much mr. olsen. i'd like the members to know we have received the strongest and the largest collection on behalf of this nominee certainly since i have been on this committee and in the deputy heads of many different agencies. so those letters along with the two letters from congressman frank wolf and the addendum to those letters will be placed in the record. housekeeping duty if i may come if you would answer the following questions yes or no please. do you agree to appear before the committee here or in other venues when invited?
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>> yes. >> do you agree to send officials from the nctc and designated staff when in fight? >> yes. >> do you agree to provide documents or other materials requested by the committee in order for them to carry out its oversight and legislative responsibilities? >> yes. >> will do ensure the national counterterrorism center and its officials provide such material to the committee when request? >> yes. >> do you agree to inform and fully briefed to the fullest extent possible all members of this committee of intelligence actions and covert actions rather than only the chairman and vice-chairman? >> yes. >> thank you very much. >> mr. olsen, the ranking member brought up the questions that have been raised by a member of congress. we discussed them in our meeting and in your prepared testimony on page five, you discuss them
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as well. you indicate in april of 09 you were part of a team of officials who provided a briefing about the initial stages of the process of reviewing the detainees and authorized during the briefing to discuss the review process. you are not authorized to discuss the deliberations or decisions on specific detainee's and so in accordance with those rules used eight on page five we've provided a full and candid briefing about the detainee review process. so i would like you to address this issue. you have raised the congressman will's letter and address it head on if you will for this committee. >> yes. thank you very much, madame share and vice chairman chambliss for providing me with the opportunity to address this question raised.
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let me just say at the outset essentially has ali understand from congressman blair or two questions. one is that we offered information or that that information was offered in the course of the task force review and that there was intentional misleading during the briefing and i would say at the outset neither of those occurred and i appreciate the opportunity to provide additional explanations of that. first, the question of whether or not that information was changed or altered over the course of the task force review. the job i had as the executive to return of the guantanamo task force in 2009 was to bring together career professionals and compile all of the information that have benefited over the course of several years but each detainee. something that hadn't been done before, and to bring that information together in one place or give that information a fresh independent and objective
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review. we've taken that information and under my leadership and under the guidelines we adopted in the innovation effort we looked at that information. it was my responsibility to ensure that was done in and in partial indian unbiased we've all the information was reviewed that was done by an approach that every dissenting board disparate opinion or view and we took that information and presented it to the group of senior level decision makers along with our recommendation and the decisions are made based on that information by the senior level group or review panel on six different agencies. the result on that over the course of the year is all 240 detainees were given a disposition and every single case every detainee was determined on a unanimous basis on what the appropriate status
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was on the detainee to get there was never at any time any effort to change threat information to hide from any fact explicit guidance with my particular responsibility was to follow every fact and be as precise and specific and rigorous in analyzing those facts and presenting the information to the policy level decision makers there were occasions we looked at the facts and looked at them different than the prior prayer sessions had them. the gitmo task for said gitmo had prepared assessments. those were all part of our information and in many cases those cases i believe agreed with those assessments. but there were instances we looked at the facts and came to different conclusions but there was never on any occasion an effort to change altar or hide from those factors. those were all fully aired. on the second question, if i may come the question of whether or not i intentionally misled
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congressman wolf in the briefing. again, i did not. we met in april 2009 in his office and i was part of a team from the department of justice and the white house that went to brief congressman wolf on not just the guantanamo taskforce but all three of the task forces that were set up under the three executive orders issued by president obama in january of 2009. this is the early stage of the review process. we had just begun efforts to review the set of detainees and it was made clear to congressman wolf during that briefing that the ground rule would be that we could discuss the process that we are undertaking to conduct that reach you but we were not authorized to discuss any particular decision or specific detainee's. we did in fact lee of the process for him and i understand now he has expressed concern he
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wasn't given full information about the actual decision making process with the group of detainee's known as chinese uighurs at guantanamo. i did not discuss, not because i was not authorized or make a unilateral decision the department of justice officials what the status was of the decision making process. i certainly as i said to the congressman wolf in a conversation i had on the telephone a few months ago, and to stand his frustration i very much regret he has the view that i intentionally misled him coming and i do hope that if i am confirmed i would have the opportunity to regain his trust and work with him in a collaborative and cooperative we moving forward. i will say that as a general matter, i have been candid, honest and direct with my actions of congress i've met many times with staff and
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members of this committee over the course of my career as a government official not only on the guantanamo review but also d amendment act and other matters and i take it as a matter of pride in the deeply held view that life and honest and candid and direct and as i said i do hope i have the opportunity to regain and work with the trust of congress and walls and work with him. >> thank you very much. mr. vice chairman? >> thanks, madame chair. mr. olsen, let me carry that question one step further because obviously it is a very, very serious issue when you have a member of congress who thinks that he has been misled so i want you to have the opportunity to explain and i want to quote to you what congressman wolf's recollection of the scenario was in the memorandum that he prepared within the last couple of weeks.
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i know you had the opportunity to look at it. here is what he says. he said it has recently come to my attention that i was misled about the status of the transfer of the knees in april, to those inclined to read the information confirms the newsweek report the federal employees were explicitly directed to hide the information from the members of congress especially republican members. during an april 22nd, 2009 meeting in my office with members of the guantanamo bay detainee review task force including mr. olsen, i inquired about the status of the potential transfer of uighurs detainee's to the united states. mr. olsen indicated that the decision had not yet been reached on the transfer of the detainees. none of the other carrier or political officials in the meeting countered mr. olsen's assertion. i was deeply concerned to learn in an april 2011 "washington post" article that the final
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decision on the transfer of the uighurs detainees had been made during a white house meeting eight days before my meeting with mr. olsen. according to "the washington post" article, the first concrete step towards closing of a detention center was agreed upon during an april 14, 2000 - session at the white house. it was to be ase dolph moved. they were going to show up here and we were going to announce this said one senior official describing the swift secretive operation that was designed by the administration to putting up any political outcry that could prevent the transfer. mr. walls goes on following the publication of this article in april and i personally call mr. olsen to ask whether he was aware of the time of any meeting with him on my meeting with him on april 22nd, to thousand 9 that a decision had already been made on the transfer of the detainees. he told me that he was aware of
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the decision prior to our meeting. i believe i was intentionally misled by mr. olsen and other administration officials during my april 22nd meeting with the task force, but i'm also concerned that the attorney general did not acknowledge that a decision had been made when he appeared before the house commerce a house appropriations subcommittee in the following day. that's why i was surprised when my office was notified by the federal employee that the administration was misleading the congress and planned to secretly transferred the detainee's a around may 1st, 2009. now white understand you are saying you were not at liberty to discuss the details of any particular detainee, but this goes beyond that. his comments go beyond that so i want to give you a full opportunity to address what congressman wolf remembers about that meeting.
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at the time that briefing occurred, congressman wolf, in april 21st or 22nd, they're had at that point and a decision by senior level members of the administration, again, the process was to make recommendations to a senior review group in this case this went to a very high level group of senior officials and the decision at that point i think april 14th is the right date i went back and looked at my notes to have been the decision to take to move transferred a small number of detainees, uighurs detainee's to the united states. there was not at that time a decision on which detainee's to move or as i recall no decision about where exactly they would go. but i remember a time of the briefing that there had actually been as i said a decision to move the two detainee's to uighurs detainees to transfer
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those detainees to the united states. so, at that time, they're had been that decision. the fbi and the department of homeland security as i recall were given the responsibility not my task force, not guantanamo task force to determine which detainee's were the right to move given the consideration when to do that and what circumstances owned where they would go and those efforts were underway. i at no time did i say that there was no decision to congressman wolf. i just believe it's the recollection or misperception. there were operations under way and i wasn't authorized to talk about the detainees. i did understand the frustration. i don't -- i did not mislead, i wasn't in the position to decide myself out that time and the process was.
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we have met before the briefing and talked about what we were going to say and talked about in terms of the review process, and i do very much regret she has taken that view and i do understand his frustration with learning the through the press leader that that decision making process was well under way. but senator, that is exactly where that stood on that day when i briefed congressman wolf the decision to bring the detainee's at which ones and there was no decision about exactly where they would go within the united states. >> condra symbol's memo he refers to other political officials that were in that meeting. did you go back and visit with of those individuals to get their recollection of exactly what was said after congressman wolf came forward to this?
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>> i talked to of verse where preparation for the briefing. i haven't talked to >> i talked to other members of that team several months ago because i talked to congressman bullfighting in april of this year and around that time i talked to a number of the individuals who were part of that briefing, and it was -- and i think our recollections were the same as to how that briefing went. >> can you provide the committee with the names of the above their individuals in the meeting at that time within the next 24 hours? >> absolutely. absolutely. and i have the other steps i took, vice chairman, was to talk about the department of justice legislative affairs office, and i believe that the attorney general submitted a letter to the kennedy along the same lines the ground rules for that briefing or that we would talk
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about the process but not the specific decisions were detainee's. and in fact a letter was sent to congressman wolf in july of 2009, so after the april 2009 briefing which reaffirmed the decisions in the detainee's or not the subject on which the briefings with ochre or had occurred that we were able to talk about the process, so even at that time in july 2009 in the letter to congressman wolf, that was made clear and present it to congressman wolf in a letter from the department of justice. >> if i may add one other quick point on this because i think -- i really want to address what i understand from the committee define confirmed and in a position such as the director of the ctc, i believe wholeheartedly that in that role i have an absolute of certain legal obligation to the best of my ability to provide all intelligence information in a
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full and timely way to this committee, and i believe that if i am in that position, i authority and ability to make that judgment greatly exceeds what it was in april of 2009, and the committee has my full commitment that i will live up to that obligation. >> mr. vice chair, there is a letter dated july 22nd, song and by the assistant attorney general which clearly states the officials who provided the briefing including mr. olsen to discuss the review process in general but were not authorized to discuss deliberations or decisions about any specific detainee's and it goes on to say consistent with the parameters set for the briefing she did not discuss the decision making or specific detainee's and this
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would be available in the next up is senator conrad and he's not here, senator wyden? >> thank you madame chair and mr. olsen, thank you for the visit. i appreciate your candor and also taking time to go over and meet in the secure facility so we can discuss since it is matters. i've been on this committee for morgan a decade now, and i believe this is the first time we have had this top lawyer the national security agency before the committee in an open session. i'm not going to get into any details of how the nsa does business but since you're the chief legal officer at one of the country's largest intelligence agencies it's safe to say that you are an expert on surveillance law. estimate that like to ask several areas of the
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surveillance law and how you and your colleagues interpret the law so we can get some of this information on the public record. >> the first question is would you agree the key portions of the patriot act has been the subject of significant secret interpretations and these interpretations are secret today? >> thank you. i did appreciate the opportunity to talk to you in your office and the classified setting to talk about some of these matters come and i appreciate your ongoing interest and concern. the direct answer to your question is there are provisions of the patriot act that are the subject of matters before the intelligence surveillance court. that meets in a classified setting and some of the
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pleadings and opinions that relate to the patriot act that have been part of proceedings before the intelligence court are classified. >> so it is fair to say that the patriot act and how they are illegally interpreted are being kept secret as of today. >> it is certainly fair to say that there are opinions from the court that are classified. i feel it is important to add that those opinions are part of what is provided to this committee and the activities undertaken in accordance with those orders of the court are subject to oversight. >> would you agree the key portions of the amendment act of 2008 would be the subject of significant legal interpretations? and those are secret? >> yes and let me add that the answer is similar to the patriot
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act there are particular provisions of the act in the course of implementing those provisions the government and part of this effort submits pleadings to the court and by design again under the statute that by the court issues considers those pleadings in a classified setting and issues opinions authorizing or not those activities and it is the case if i may also added as we have reviewed those opinions and looked at those opinions working with you and others that it's very difficult at times to separate those portions of the opinions that are subject to be disclosed because the only contain legal information verses the linkage or the intertwining of the legal analysis and facts. >> say you have said that there are in fact secret legal interpretations with respect to both the patriot act and the
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amendment act and is their anything further that you can tell about the subject matter? >> i don't think that there's anything further i can discuss in an open setting and i know that you will appreciate that. i know that you appreciate and you do the importance of protecting the sources and methods described in those opinions. i would restate what i just said. >> my time is very short. kube giving thoughtful answers as you know we have a difference of opinion here. it's my view that we have to keep operations and methods secret, but we have to also have public awareness of bill law is on the books we are going to continue this discussion. i need to ask you one other question and that is on a different legal topic to the government agencies have the authority to use data to track the location of americans inside the united states for intelligence purposes? >> i know that is a question
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that you have opposed to the director of national intelligence. it's a question that is a complicated and difficult question to answer particularly in this setting. i would say that the intelligence community is working as we speak and i know we talked to your staff in developing a comprehensive answer to that question which will be provided in writing. >> madame president, i know my time has expired but just a quick follow-up on that. you seem to be suggesting that the executive branch is not yet settled the question. is that accurate? >> i think it's important to be precise about exactly what the question is. >> the question is does the government have the authority to use the data to track the location inside the country? i think you answered initially
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it haven't been settled by the executive branch by respect whether or not there is that authority. this is an extremely important point. you are saying it's not yet been settled by the executive branch it has that authority. >> there are certain circumstances in that authority. it is a very complicated and difficult question and i would ask your indulgence to allow that question to be prepared in writing to you, senator. >> thank you, madame chair. >> i know of your concerns, and we have discussed them and what i would like to do in the first hearing in september when we come back assuming there is an august break, i'd like to have that classified session and would ask mr. olsen that you have that many of prepared and the answers in writing that you and any authority that you wish to bring with you will attend
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the hearing. do i have your agreement? >> madam chair, i would just like to say to you and colleagues you have been fair in terms of handling this issue. as you know, senator udall and i have had concerns about it and have been examining it in both classified and open session and i want to thank you for the when you're handling. >> you're very welcome. >> senator conrad? >> madam chair and vice chair and members of the committee, instead of asking questions i would like to make a further statement if i could, madam chair, about this nominee. she comes from a family that i have known for 30 years. a family that was on the other side of the aisle from as i indicated before his saw there was the chief of staff and the
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man i defeated for the united states. yet he treated me with the greatest generosity of spirit that anybody could ask for. now i just want to say these are people of the highest of the very highest quality in every single way, the highest character. i would trust matt olsen with every penny that i've got because of the character of his family, and i know around here as all demolition derby my god when does it end? ..
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i put my entire reputation on the line for this nominee. that is how strongly i feel. so, i have been here 25 years and i think i have conducted myself with character and i hope it counts for something when we have a nominee of this quality. >> thank you very much, senator. i think is a very heartfelt remarks and very much appreciated so thank you. senator coats. >> thank you madam chair and
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mr. olsen, and appreciate the discussion we had in my office earlier and your testimony today. your educational background is superb and your experience background is if not unmatched, very impressive. and the recommendations you have had from former attorney general mccaskey and mr. mcconnell and general alexander speak highly a few and other people, very credible people including senator conrad have spoken about your character, your family and the kind of person you are and i think it is a high recommendation. from my colleague as well as a number of other people. as you know we discussed in my office concerned with senator saxby discussed with you. i don't want to repeat all of that. i do want to state that it is disturbing that listening these news sources are credible about
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secretive plans, a stealth plan, it is disturbing if those are true. these are reputable news organizations. ism "the washington post," which i don't always agree with everything they do, but they usually check very carefully before they make this type of allegation, this serious of an allegation, this kind of can't talk good stealthy secret plan. you have discussed and for the record explained your position relative to this, where you were and your relationship with mr. wolf and so forth. but the larger question is, given the politics of the issue at the time, the fact that a decision was made by someone at the highest levels to end acts to bypass through a stealthy secret plan is a serious,
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serious charge and if true, a serious serious offense. my question to you is, and you make your pledge to us, that you will not withhold any type of intelligence that is available to you from this committee, and i take you at your word for that. what i want to ask you is the reverse of that. if you become aware of some action or policy decision, some piece of intelligence that this committee ought to know about, but that is politically sensitive and perhaps there are concerns that you might be sharing information that people at policy levels don't want shared. are you willing to serve as an independent director of nctc,
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and provide us with your independent opinion as to that? i just think it is critical that we are aware of that and so i would like to get your reaction to that on the reverse side of what you do know or relative to intelligence, or what you don't know but have some concerns about not knowing. having something withheld from you that -- i don't feel like i have been given full information relative to what this committee ought to be aware of. >> thank you very much senator. the answer is yes, i absolutely do pledge to the best of my ability to provide my unvarnished views to the committee. as i said i commit to providing full, timely intelligence information to the committee at all times. i commit to being an advocate
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for providing as much information as possible to the committee within the executive branch. i wholeheartedly believe in the essential role the committee plays and that role as a partnership particularly when it comes to intelligence matters and national security, that there is no place for political considerations when it comes to counterterrorism in this fundamentally important mission of nctc. i would be a person who would view that role as a partnership of this committee and provide that information and i would be as i said in advocate for leaning as far forward as possible as my abilities allow him to providing that type of information. at all times to the committee and if i could maybe just address sort of a specific issue. i don't want the record to reflect that i view or had the understanding that there was a stealthy or secret effort to move detainees into the united states. i don't believe and i was not
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aware that was ever the case and i don't believe that ever was the case. in other words there was a decision to move to weaker detainees to the united states. there was an effort undertaken by the fbi and dhs to chime in who and where but i never was under any impression and i never believed that effort had progressed to the point that it was going to be a secret or stealthy move but rather that there is a time for disclosing that and was not something that was my decision to make. >> thank you for that answer. i just want to restate how critically important it is that we have a trust with each other. because we are dealing with matters of incredible importance to the safety and security of the american people, and if we lose that element of trust in terms of how we communicate with each other within the intelligence community and we
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have a responsibility to ensure that we live up to our part of the bargain on this also. and i'm hoping we can do that with you and i think that is perhaps a little warning sign here in terms of let's be diligent to make sure that level of trust exists in that level of sharing of information with the committee and us with you exists. without madam chairman i yield back my time. >> i could not agree more, senator. thank you. >> thank you madam chair and welcome mr. olsen. you certainly come to this position with an impressive array of credentials and i congratulate you and certainly senator conrad's accommodation certainly speaks volumes about what you represent and what you bring to this position which is
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obviously a significant as we continue to face a growing threat. i would like to just explore with you for a moment in the aftermath of the assassination of osama bin laden, how would you describe the al qaeda threat and what it poses today? i know you have said it is significant and it remains the most significant threat to the united states in combination with regional affiliates that were dispersed and as you mentioned it is certainly a dynamic and complex environment and certainly an asymmetrical threat. how to identify, how to quantify. where do you think we stand today in terms of one, mitigating the threat and certainly since the killing of osama bin laden? >> thank you very much senator. the threat i think today is as diffuse and as complex and challenging as it is.
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certainly it is the case that again, through the leaders of congress and the hard work of thousands of men and women both in the intelligence community and the military we have made substantial progress against al qaeda and its affiliates. and the killing of osama bin laden was a significant milestone in that effort. it is clear i think from the threat of information i have seen both beginning in 2004 when i started working with the fbi and my time at the department of justice and my position now the national security agency that al qaeda in many ways is weekend. it remains the case however that it is a more diffused and dispersed threat as he made reference to and in particular i think the concern that the vice chairman made reference to with respect to al qaeda's presence in yemen and in places like somalia makes it particularly challenging from a counterterrorism perspective. i think that, in some ways, the
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opportunity that presents itself now to the counterterrorism community and the united states as well as with their allies around the world is that we must actually redouble our efforts and is the president has said al qaeda is on the path to defeat but we have to look at that thread in all of its various forms not only in the tribal regions of yemen, but in the foxtrot and pakistan and also in parts of north africa. and in somalia. ultimately, the nctc's mission is to stop another terrorist attack and if i may just say that the leadership of mike leiter and an acting capacity of andrew lieb and i think nctc has played a vital role but it is a team approach and we face a challenging at times as we ever have. >> are you confident that we have the ability to get no work
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across the agencies as you obviously to coordinate and integrate all of that analyses? do you think we have got it? >> i think we have made a lot of progress. i do think as this committee and this report on the abdulmutallab attack of december 25, 2008 demonstrated, -- or 2009 that we have, we still face challenges and particularly i reviewed the vice chairman's and senator burmex's separate opinion which was quite critical and appropriate so i think it certainly of nctc. senator if i may say, think the greatest challenge facing nctc is the greatest strength that it brings together analysts, planners and other professionals to bring all these different viewpoints together. how do we reconcile these backgrounds and perspectives? that is really its greatest strength.
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we need to rely on the intelligence committee to provide those professional and provide an environment where they are located together and collaborate. so in direct response to your question i think that is one of the greatest strengths of nctc and i think we have some progress to be made both for his respect to the collaboration feature but also information sharing and breaking down barriers to sharing information not only within nctc but with our partners. >> you mentioned that the greater the capability of al qaeda in pakistan, which how do you compare that threat with respect to the regional affiliates? which is greater? >> it is difficult to answer which is greater. i do agree with the vice-chairman's observation that recent events would suggest that the regional affiliates particularly al qaeda in the arabian peninsula and its presence in yemen have shown a willingness and a level of capability to strike in the united states. i think that must be a primary
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focus. >> do you think that is the single greatest goal of al qaeda, is to strike the united states? is that there are planned? >> it certainly remains a significant goal. its goals are multivariate in the threat and again part of the challenge of that threat is not so much the senior leadership in pakistan with one unified goal. it is now diffusing various regional locations under various leaders and with very as schools, but it is certainly sufficiently a goal that it has to be nctc's number one mission. >> how would you define the strategic defeat of al qaeda leadership? >> the strategic defeat of al qaeda? i think i would define it as ending the threat that al qaeda and all of its affiliates pose to the united states and its interests around the world. >> thank you.
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thank you madam chair. >> thank you very much senator snowe. senator wyden has some additional questions and the vice chairman and i also, so senator wyden why don't you go ahead? >> thank you madam chair and just two additional matters. following up on senator snowe's question, mr. olsen beyond al qaeda's core leadership in pakistan and the al qaeda affiliates in yemen which terrorist group in your view poses the greatest threat to the country? >> i would say that beyond the al qaeda leadership in pakistan, its presence in yemen, probably the next most significant terrorist threat may emanate from the al qaeda presence in somalia. in terms of the willingness and apparent ability or at least the intent to strike outside of that particular country.
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we know that country, that group has successfully mounted an attack in uganda, and the apparent ability of the regional affiliates such as that to outside of the borders that country think poses a significant threat. but the threat goes beyond even just al qaeda of course and its affiliates. to two other groups such as hezbollah. so i think again, i have to say that i am not in a position at nctc now so i approach these types of questions with some humility and some deference to the professionals who are looking at these questions on a daily basis. >> one last question if i might. earlier this year undersecretary colin from the treasury department told the finance committee on which i serve that kuwait has become one of the most challenging countries to deal with when it comes to counterterrorism and in addition bad as other gulf states have improved their cooperation with
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u.s. terrorist activities in the gulf, we are seeing in effect kuwait become more permissive, significantly more permissive. do you have an opinion on this yet? >> my answer senator if i may is somewhat general. i would say our relationships with countries such as kuwait and other gulf states and certainly countries like pakistan are complex and have multiple dimensions. i do think that the counterterrorism effort is a central goal or a central feature of those relationships. if i am confirmed i would look forward to the opportunity and the role of nctc director to provide my objective and my unvarnished view about the counterterrorism threat to contribute to the overall discussion and development of a posture or a country like kuwait. >> thank you madam chair. >> thank you very much. mr. vice chairman why don't you go ahead and i will finish. >> mr. olsen i want to ask you,
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on three or four different subjects here to give us a general discussion and response to some questions that i'm going to lay out, but i am more interested in your general discussion on the issues. but obviously i think the questions will throw out some ideas for you. december 2009, it had become clear that many transferred gitmo detainees had joined the qap in yemen. additionally the icm state department took a dim view of the willingness or capability of the yemeni government to monitor detainees and i believe such assessments were made clear to the task force. yet in late 2009 the task force decided to transfer seven yemeni detainees back to yemen. only one of him was ordered released by the court and his case was not appealed. now, my questions are common december 2009 did you personally
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believe that it was a good idea to transfer detainees to yemen and secondly you told us before that you were trying to test the system by sending a group of detainees back in december of 2009. do you think testing the system when the result of a failed test could be an attack on americans was a good idea? and lastly, in hindsight, in light of the fact that the government is winning all of its habeas appeals would you have changed any of of the task force transfer decisions and do you think dangerous detainees were transferred as a result of the task force process? >> senator, thank you and i do very much understand of force in our conversations both my conversation with you as well as the ongoing discussions i've had with members of the committee staff that the substantial concern about the detainees from yemen and the transfer decisions that were made back in 2009.
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so if i may give you a relatively general, longer answer i would appreciate your indulgence. the yemen dt nabe population was a concern of the task force from the outset. when we started this process under the president's executive order in february 2009 there were 97 yemeni detainees out of the 240 detainees subject to the refusal by far the single largest nationality represented at guantánamo were from yemen. and this was a problem that existed before 2009. in other words prior to 2009, government officials had struggled with how to, how to handle the disposition of the substantial number of yemen detainees. over the course of that year. task force effort, we were very aware of a number of different factors. one, that the situation, the security situation in yemen was continuing to deteriorate over the course of that year and by
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december of 2009, we were quite aware of the concerns that the intelligence community and our military leaders were expressing about yemen. we were also quite aware that our record of success and the habeas court, the number of yemeni detainees as well as others were challenging the lawfulness of the detention, and we were being briefed by the department of justice about how those cases were going. at one point in september 2009 every call that we were approximately eight successful defenses versus 31 losses in the federal courts and there was a real concern being expressed by the department of justice that not only for refusing to cases but we were losing our credibility generally in a way that was affecting facts and legal rulings that might impact the cases down the road. i think the other factor that was a significant one for us with respect to yemen was that there were no options that appear to be available in terms
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of other countries willing to take detainees from yemen, not countries that had rehabilitation programs and not countries in europe that had been taking a number of detainees i think over 50 over the course of the last couple of years, who had humane treatment concerns about eating repatriated to their home country. so i know i have just laid out you a problem that you are well familiar with but those were the factors that were presented to us as we conducted this review. our job on the task force and i felt in my responsibility as the executive director was to provide the best factual information and the most precise, specific and rigorous way possible to decision-makers. we did that over the course of the review. the decision to send seven detainees in december and now i know in a yemeni detainee has been repatriated to yemen, those decisions have all been made at very senior levels in all based on unanimous judgment of six representatives of six different agencies including the department of defense, the
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intelligence committee and the joint chiefs of staff. two of those they detainees were ordered released by the court. i think when i said in our conversation that the six or so that went in december, that number is correct, or before in the fall of 2009 -- i don't member the exact timeframe but the thought there, and i was present for some of the discussions although it wasn't a voting member or decision-maker, the thought was we would never at any time send a significant number of yemeni detainees back. the question was, could the yemeni government and security forces handle the security measures that would be necessary to ensure that those were done, those transfers were handled responsibly. our process had a very strict standard. no detainee would be eligible for transfer unless any threat that detainee posed to be sufficiently mitigated through adequate and appropriate security measures in the host country. that standard never changed from
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the beginning to the end of our task force review and that was the standard that the decision-makers who made the decisions applied. so if i may in some, i think those are very difficult decisions and i want to address your question before i forget. it is true i cited the habeas record of eight and 31. we have done much better from the executive branch's point of view since that time. we have had a number of successful litigation victories in the d.c. circuit, the court of appeals. the question whether not that would have changed our view or the view that the decision-makers on a particular detainee i think is hard to answer and somewhat speculative on my part. i do think that it would have lowered the significance of that factor as it pertained pertains to a particular detainee. so, i suppose i could say it is possible that it may have affected the decision but it would be speculative for me to say more about that.
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>> you mentioned my office with respect to the pressure on the task force that there was pressure in part because the task force was guided by the executive order on closing gitmo. can you explain about how that treasure and how that pressure existed and what you did to try to make sure your decisions were not influenced by that? how many attorneys assigned to the task force had represented detainees before joining your staff and did you feel pressure from any of those attorneys, others the doj or other parts of the administrations to lean towards transferring as many detainees as possible? >> as i mentioned to you senator in our meeting, it certainly was the case that we had an executive order issued in january 2009 and that we were duty bound to follow that executive order. that executive order sent forth three potential options for each
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detainee, transfer of such a transfer could be a calm pushed consistent with the foreign-policy interest of the united states. that was the first option. if transfer was not available, prosecution is feasible and if transfer, neither transfer nor prosecution was an appropriate option and then select another appropriate option undefined in the executive order. i wouldn't necessarily say that was pressure. that was guidance or direction from the president of present of the united states to follow that and i felt my obligation was to ensure that everything that the task force did certainly follow that direction but did not respond to any of what was obvious at the time, controversy from both sides about guantánamo. it has been a subject of controversy for many years. i felt it was my obligation to insulate the career professionals who worked on this review. over the course of the year in 2009 over 100 people worked on
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this review from the department of defense, from the intelligence community, cia, nctc, homeland security, state, justice and every single one of them was a career individual. in response to your court question i don't believe a single one of the attorneys who worked on the review had ever played a role in representing detainees. i know that it's been is the subject of controversy and has been reported in the press in the past. with respect to other justice department attorneys i don't believe anyone on our task force have ever worked in that capacity. everyone who worked on my review came from the career ranks. as i said i felt that was it was my responsibility to insulate that group from any of the types of controversy surrounding guantánamo and i think i may senator say the results of the review, the recommendation and the analysis we did resulting in the unanimous decision of 240
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detainees speak for themselves in this regard. out of those 240 detainees there were 126 transferred but there were also 48 decisions to hold those detainees under the laws of war. when we started the review in january 2009 that was not necessarily considered an option. we push for that as the right option for 48 detainees that they could not be tried and there was not evidence to try them. they could not be transferred safely and they needed to be held indefinitely under the laws of 48 of those detainees. edition 36 detainees referred either to the military commission or the federal courts for prosecution, 36 in that category and dirty yemeni detainees of conditional the attention. those 30 detainees, the decision was that they would not be transferred. they would be detained until the security situation in yemen substantially improved, something that obviously has not happened. said they are effectively in the same category as the 48 held
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under the law before. >> the chairman and i'd love are very concerned about the fact that we currently have no detention and interrogation policy going forward with respect to individuals who may be captured, high-value targets that may be captured outside of afghanistan. as director of nctc, you will be integrally involved in deliberations relative to any proposal for a long-term plan on detention and interrogation and my question to you is, are you prepared to give sound advice, number one, that you are going to be asked to give and secondly, if the administration appears to be headed down a road that you don't think is the right direction to go, will you say to this committee now that you are going to express yourself in a very strong manner
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to help to try to develop the best possible policy for detention and interrogation of high-value targets even though your opinion may be contrary to the folks at the white house who are nominating you today? >> yes, absolutely and if i may, i do make that pledge. i think in my prior position, i had taken a position. in other words i have given advice in an unvarnished, objective independent way as a career government official. i've made known my personal views and sought to move positions based on my objective and independent and nonpolitical perspective. i do think that these questions senator, if i may say, some of these questions are the most difficult ones that they face we face from a counterterrorism perspective. the question of detention policy, i absolutely agree that it would be my responsibility if
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i'm honored to be confirmed to get my unvarnished and objective views and share the intelligence with this committee and advocate for what i believe is the right thing to the best of my abilities within the executive branch. >> you some would argue that gitmo should be close because it is used as a recruiting tool for al qaeda and that may be true but yet, al qaeda uses a policy with the death of bin laden and a host of other issues as recruiting tools and no one suggested we should change these policies. in your current position or positions you have held, have you seen any evidence that we are safer or that recruits have fallen off as a result of the president's announcement of his attempt to close guantánamo? >> i have not seen, from again, my perspective both on the task force and much more limited perspective in my credit role as security agency, anything specific in response to your question to that effect.
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there is a change in recruiting based on the current government. >> lastly, let me tell you an issue that we have got that i know you are aware about and get your thoughts on it. in the past nctc has raised a number of concerns about not having access to all the intelligence information it needs. of particular concern is access to information and the department of homeland security. generally dhs is reluctant to provide information relating to an individual's asylum or refugee status on the grounds assuring that information would violate u.s. personal restrictions. the specific legal basis for dhs think --'s position is unclear. giovanni thoughts on how we can address that trouble him with dhs and our asylum seekers, u.s. persons are considered u.s. persons? is that an issue in your mind?
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>> senator i am generally familiar with this area or this issue. i don't have the specifics of that particular concern with dhs. i've had some briefings about this question. if i may say, i do believe that given my role at the department of justice, and my role now, that i have both an understanding, actually a deep understanding of the rules that apply to protect civil liberties and privacy of u.s. persons but i also i think have a very strong view and a record of finding the appropriate ways to overcome legal, sometimes perceived legal as well as a policy barriers to sharing information. i don't believe that there is a strong basis for, as a policy matter, not allowing information to be shared when that information is necessary to protect the mega-people and if i
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am honored to be confirmed it will absolutely be my commitment to find a way to overcome expressed concerns about sharing information when that information is necessary to subport and ctc's mission and that is to prevent another terrorist attack. so certainly you have my commitment to look very heart of that question. >> as you and i discussed in my office the critical role that nctc plays is for the most part centered around information sharing, and it is a requirement that u.s. director of nctc share information you have that you have got to get the information first. and let me just say that the chairman and i without question read it to make sure you have all the tools that you need and from a policy standpoint we are prepared to do what is necessary to make sure that the information that you have to be shared is all of the intelligence information. and let me just close by saying
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that as the chairman stated, we have gotten inundated with letters of recommendation which you should feel very honored to be supported in that respect. i know you are. letter from general alexander was very calm mentoring and not only did he write a letter, but he happens to be a good friend and a guy that i have the utmost respect for. he called yesterday to reinforce that recommendation and because i have such respect for general alexander, that means a lot. so, we will look forward to moving down the road and the only thing i would remind you of to get us the names of those individuals in that raving and hopefully we will get this nomination move through quickly. madam chair, thank you.
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>> thank you very much. you know i would like to close off the briefing. i cannot imagine a more thankless task then being director of the policy committee of which you were director, because you know, no matter what, it is thankless and no matter what there is going to be criticism and particularly in those days as i recall them, where it was so very very difficult. so i just want to thank you for that and in my book, you are a straight shooter and i think that is what matters here. i would like to just talk about the vision thing for a moment, if i might. one of nctc's statutory responsibilities is to conduct strategic operational planning for counterterrorism at two goodies and integrate all of the instruments of national power. however, when it granted nctc
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this responsibility, congress didn't provide you with any authority to compel action in these areas so we may have to go back and look at that again. five, the question is, what is your vision of nctc's role in conducting strategic operational planning for counterterrorism activities and integrating all the instruments of national so-called power into that planning? >> thank you very much senator. so as you point out, one of the critical missions of nctc is the strategic operational planning mission. i do believe that nctc is uniquely positioned to conduct that mission and my vision for that is consistent with i think the effort in the progress that nctc has made in that regard over the last couple of years. that is, bringing together the various represented entities, whether it is the military or
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intelligence community, combining those perspectives and those perspectives, in a way that will allow us to make sure that the efforts that the u.s. government is undertaking to combat terrorism, whether it is on a regional level focusing on a particular region or a pretty or problem such as or if particular topic such as counter violent extremism, conducting and all of government approach to address those issues. something that nctc is i think as i said uniquely positioned to do both because it has members from all these different age as he's brought together and because it has the mission granted to it by congress. so i would consider that to be one of the focus focuses that i would have and i would also commit and i would not hesitate to return to this committee with updates on that effort and to tell you if i think that there are authorities that are lacking
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that are necessary. >> good. you are also the national intelligence manager for counterterrorism, and in that regard you are going to be responsible for evaluating the intelligence communities performance on terrorism and recommending budget allocations across agencies. in my book, this is a very important job. how do you see yourself carrying this part of your responsibility out? >> thank you for that question. i have had an opportunity to talk alyce briefly with director clapper about this very important role particularly under the leadership that he has for odni and the intelligence community in general. i think that nctc has done a good job in its role. it is i think a real focus because of the challenges that we face. >> it i don't particularly like bad acronym.
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>> it's not my favorite either. >> this is a big deal. in i don't dig it should be trivialized and i think it is one area where there is not enough done that there is not enough central administration of budget authority. >> ride, so i will stick with national intelligence manager. and, i think the challenge is that we do face a much more difficult vegetarian byram and then we did in the last few years and i fully appreciate that reality. i've seen it in my role at nsa where i have been part of the senior leadership meetings about how nsa is going to react and respond to the budget constraints that we are likely to face, that we will face. the question will be, how do we make sure that we are focusing on the right priorities as a community and how do we achieve efficiencies where we can in order to meet the challenge that
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the current budget environment proposes? >> well, you see, from my point of view counterterrorism is extraordinarily important. is vital to the protection of the homeland. therefore having a strategy and an approach to it and a pattern and a practice that is well-established and carried out across the government is very very vital to have. candidly, i don't know whether we have that today, and so this question is meant with a view that i think it is really it ryan mission of yours. >> i appreciate that and again i will make for that reason, make that a prime mission of mind and will again commit to come back and talk to you and the committee and the staff and keep you apprised as often as necessary on the progress we are making. >> alright.
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one last thing. as you know the defense bill had some language on the tension in it, some of which is good and some of which we think is not good. week, you know as chairman of the committee, retrying to draft some legislation. i would like to ask that you help us and work with us on that if you will. >> course i will, yes. >> thank you very much. i see no other member, so we would like to have the director of the nctc in place actually before going on the august recess. and i really think this is a very important matter that we are able to do that. so i would like to ask that any questions for the record be submitted by 5:00 on wednesday. that is tomorrow afternoon. so we can get answers and vote on the nomination just as soon as possible. we do not want to leave this agency leaderless.
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i thank you for your service to our country. i hope -- i have been watching the faces of your three children and your wife's supervision in her eyes. [laughter] as this hearing has gone on, and i just want you three to know how very proud we are of your father, that he has been just of enormous service to this country and has much more yet to do and i hope you are very proud as well. so, with that in mind, we will conclude this hearing and move your nomination onward. thank you very much. [inaudible conversations] [inaudible conversations]
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[inaudible conversations] up next on c-span2, a senate confirmation hearing for several financial regulators. ;5b8:
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the senate banking committee looked at the nominations of three financial regulators, including the president's choice to head the federal deposit insurance corp. and be the next comptroller of the currency. the committee also considered a nominee for the financial stability oversight council which the dodd-frank financial regulations law created to identify and respond to threats in the u.s. financial system. south dakota democrat ken johnson shares his 90 minute hearing. >> good morning. i have called this hearing to order. thanks to all of our nominees for joining us here today. i also want to send a warm welcome to our witnesses families and friends who are here with us. today, we consider three nominees that will play a key
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role in the safety and soundness of our financial system as well as protecting consumers. we need strong leadership and all our financial regulators and i'm glad the president has sent us three well-qualified individuals to fill openings at the federal deposit -- and on the financial stability oversight council. especially at this point in and their economic and financial recovery, these are extremely important decisions to be filled. under the wall street reform act, the fda seed was given new authorities that put an end to too big to fail by allowing orderly resolution of the large, complex financial institutions. those authorities are a key part of make insured taxpayers are
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never again forced to bail out wall street and it is vital that the fdic have it senate confirmed chairman as it works to implement these rules. both the fdic and fsoc play a crucial role in our nation's ongoing recovery. recent reports exposing abusive practices by mortgage servicers and banks from the obsessive the -- excessive fees to fraudulent foreclosures highlight the importance of continued oversight and regulations of the housing sector. the occ and f. toc have also ensured that consumers and small businesses continue to have access to credit from maintaining consumer access to a stable mortgage market to protecting small businesses access to capital, to help
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create jobs to promoting small community banks ability to provide credit to consumers in areas where big banks simply won't go. these agencies have their work cut out for them. i will look to our nominees to place a priority on all of these issues at their agencies. lastly, the financial stability oversight council is a key part of the wall street reform act. it was created to identify it systemic risks posed by a large, complex financial institution before their threaten stability of our economy. i am pleased to consider the nomination of mr. woodall to be the voting insurance expert at fsoc. they showed us how interconnected the insurance industry is with the help of our
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economy and i'm sure that mr. woodall's contribution as an fsoc member will be invaluable. the stability of our financial system and of our economy is very important, so i hope we can move quickly on these nominations. now i turn to senator shelby for any opening remarks he may have. >> thank you mr. chairman. today in the committee we will consider several different nominations as the chairman said. martin gruenberg has served as the federal deposit insurance corporation. is no stranger the banking committee having served in the staff over 19 years. for the past six years he served as vice chair of the federal deposit insurance corporation. as chairman he was overseeing the fdic at a challenging time. due to the financial crisis and the weak economy bank failures continued at a steady pace. it will be no easy task for the
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fdic to resolve these failed tanks in a manner that protects the deposit insurance fund. the fdic must also decide how it will undertake the new regulatory responsibilities that it's acquired under the dodd-frank act. i hope to hear how mr. gruenberg would approach both of these tasks. in particular i would like to learn his views on whether the fdic's new resolution authority will be sufficient to and too big to fail and prevent further government allows. also, before us today is thomas currie who has been nominated to be the comptroller of the currency as the regulator of one of our largest banks and plays a key world ensuring the safety and soundness of our home banking system. accordingly i hope to hear his views on capital requirements. one of the lessons of the financial crisis should be the importance of maintaining strong capital where crime it's especially for large local banks.
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finally, lloyd woodall has been nominated to serve as a member of the stability oversight council. he will be a sole member on the council specializing in insurance issues and the first person to hold this position. he will be working on a council that includes the treasury secretary, the federal reserve chairman and all of the heads of the major financial regulatory agencies. since mr. woodall would not be supported by the staff of the financial regulators, unlike the other members of the council, i am interested in hearing how he believes he can most effectively express his views and help the console monitor systemic risk. the federal government has historically paid little attention to insurance. the failure of aig however demonstrademonstra ted that the federal government needs to do a far better job monitoring risk in this group in the financial markets. hopefully mr. woodall can improve the federal government's understanding of the risk
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presented by insurers and in so doing help prevent another aig. mr. chairman i look forward to hearing from the nominees. >> are there any other members who would like to make any remarks? now for a brief introduction of our three nominees. senator paul sarbanes former chairman of the senate banking committee will introduce martin gruenberg, senator sarbanes? >> chairman johnson thank you very much. senator shelby, senator corker, senator toomey and senator moran prank. i am pleased to be back on the committee room and i am mindful of the chairman's gentle admonition when you choose me when he said brief introduction. [laughter] i will do my best to abide by that. is hard for former senator when he gets the microphone to do
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that. i'm very pleased to have the opportunity to come before the committee today to introduce the president's nominee for chairman of the fdic, marty gruenberg. marty worked on the staff of the senate banking committee for almost two decades, both as staff director of the subcommittee on international finance and monetary policy and as senior counsel, and i think all would agree made an extraordinary contribution to the work of the committee, and i should take a moment just to recognize all staff to the committee who do a terrific job day in and day out. i have enormous respect and admiration for those who staff the committee and this committee in particular has had very high standards over the years. during his time on the committee, he was involved in all of the major legislation enacted by the banking
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committee, including the financial institution and reform recovery act, the federal deposit insurance corporation improvement act, highly relevant for this nomination, gramm-leach-bliley, sarbanes-oxley and so forth. in august of 2005, he was appointed by the president george w. bush to the fdic as vice chairman and of course was confirmed, was recommended out by this committee and confirmed by the senate. as fdic vice chairman, marty was closely involved in all of its efforts to respond to the financial crises we have encountered. he actually served as acting chairman of the fdic for eight months from november of 2005 shortly after he won on the board until june of 2006, because chairman don powell, a
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close friend of president bush's, left to go coordinate the recovery effort in the gulf coast in coast in the aftermath of hurricane katrina. actually four months after he left the committee he was acting chairman of the fdic. i called him up and i said marty, i read in the american banker this morning that you are the chairman of the fdic. in four months time. said they gave a kind of embarrassed laugh and he says yes, that's right. i said marty is this a great country or what? [laughter] i simply want to close with this observation and given his experience on the banking committee and at the fdic, marty is extremely well prepared to serve, as its chairman. he would ring right from the beginning, stability and continuity to the work of the fdic, which is both the chairman
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and the ranking member indicated is a very important consideration. i simply say to the members of the committee i know marty to be a person of exceptional ability and character, and i very strongly commend him to you for this position. thank you all very much. >> thank you senator sarbanes. i will now introduce thomas curry. thomas curry took office on january 12, 2004 as a member of the board of directors of the fdic for six-year term. mr. curry also serves as the chairman of the america board of directors. prior to joining the fdic board of directors, mr. curry served five massachusetts governors as the commonwealth commissioner of banks. he also served as the chairman of the conference of state bank
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supervisors from 2000 to 2001. senator ben nelson will now introduce him. >> good morning mr. chairman and ranking member shelby and members of the committee. thank you for conducting this hearing today and for giving me the opportunity to offer a few comments on an outstanding nominee, roy woodall. has been nominated to be a member of the financial stability oversight council. when roy asked me to be here with him today to introduce him, i said i would be honored to do so because roy and i go back a ways and then some. in fact i first got to know roy and the years of the sound of music when the academy award for best picture and the first tv episode of "star trek" was broadcast. you know how much it cost to send a letter back then? 5 cents.
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it was 45 years ago. you see i met roy in 1966 when he was at 20 commissioner of the kentucky insurance department and i was working in the nebraska department of insurance at the time. over these years i have followed his career closely and we have kept in touch and we have many common friends. as we all know, the dodd-frank law cause for point and of an independent insurance expert to make sure that the insurance viewpoint is acknowledged in the financial stability oversight council's work. i can think of no one better qualified to be that independent insurance expert then roy woodall. he is an outstanding leader who possesses a sharp mind, has a background of knowledge needed to do the job well, and he is the wisdom too. he brings an invaluable perspective games are through a half-century of insurance -- experience in insurance and insurance regulation.
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roy woodall's has worked at the same level as in the churns attorney and helps rehabilitate troubled insurance companies. has been a national leader serving a prison of the national association of life companies and after a merger served as the senior official in the american council of life insurance. in more recent years as a senior insurance analyst with the department of treasury. mr. chairman i asked that the committee work diligently and quickly to work towards the confirmation of roy woodall to fulfill the duties of this position with skill, wisdom and integrity and i believe great success. thank you mr. chairman. ..
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your written statement will be part of the record. please also note that members of this committee may submit written questions to you for the record, and you should respond to these questions promptly for the committee to proceed on your nomination. i invite all the witnesses to introduce family and friends in attendance before reading your statement. police began. >> thank you, mr. chairman. i would like to introduce my wife, sitting behind me. chairman johnson, a ranking member shall become members of the committee, it is my
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privilege to appear before you as the president's nominee to serve as chairman of the board for the insurance corporation. i would like to thank president obama and sherman johnson and ranking member shall be for scheduling this confirmation hearing. i have the privilege of serving as the board member of the fdic since 2005 having been nominated by president bush and confirmed by the senate. from november, 2005 through june 2006 the syndicated as the acting chairman following the departure of the former chairman donald. i serve as acting chairman following the recent departure for the former chairman sheila bair. prior to joining the fdic, as you know, i worked for senate terse staff for the senate committee on the banking housing and urban affairs in january,
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1987 to august of 2005. during that period, had the opportunity to work on the major legislation acted on by the committee including the interstate banking act, the gramm-leach-bliley act and sarbanes oxley. in addition to working on some of the key pieces of legislation governing the operations of the fdic, i've had the opportunity to serve on the board as the respondent to the most severe financial crisis in the united states since the 1930's. i think it is fair to say that the private insurance resolution and supervision functions of the fdic proved critical to maintaining public confidence and financial stability during the crisis. the experiences of serving on the stuff in the senate banking committee and on the board of the fdic has been good preparation to serve as acting chairman and if confirmed, chairman of the fdic during what
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remains a challenging period ahead. if i may say, there are positive signs. although over 880 insured institutions remain on the fdic's problem bank list, we believe that number may have peaked and may start heading down in the near future. similarly, although the fdic closed 157 failed banks last year, we are projecting a substantially smaller number of bank failures this year. 58 banks failed this far this year as compared to 103 at this time last year. the fdic's deposit insurance fund which had been in the negative balance as a result of the cost of the bank failures actually moved into positive territory at the end of june. in terms of priorities the fdic will have significant responsibilities to implement under the dodd-frank act for the
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resolution of systemically certificate financial and institutions. as a primary federal regulator of the majority of the country's community banks, the fdic carries a particular responsibility for the future of this crucial segment of the financial industry. the continue to play a leading role in expanding access for the financial institutions to americans and for the opportunity and financial security. mr. chairman and ranking member shall be, it's been a great privilege for me to serve on the board of the fdic for almost six years now. i've come to have a deep respect for the professionalism and dedication of the staff of the fdic who have performed with such distinction during this recent difficult period. i believe the fdic would celebrate its 75th anniversary just three years ago is proving
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itself to be one of the country's great public institutions. it is certainly the greatest honor of my career to have been nominated by the president to serve as the chairman of the fdic and to be considered by this committee for confirmation. thank you very much and i would be pleased to respond to your question. >> thank you, mr. gruenberg. mr. curry, please begin. >> chairman johnson, a ranking member shelby and members of the committee, thank you for the opportunity to appear before you today. i am honored that president obama has nominated me to be the comptroller of the currency. eight years ago, i had the honor to be nominated by president bush and to come before this committee for confirmation hearings to be a board member of the federal deposit insurance corporation. it has been a tremendous privilege to serve at the fdic during one of the most tumultuous economic periods in the nation's history.
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i take great pride in the work of the fdic and it's very dedicated staff who maintain the american people's trust in the fdic deposit insurance guaranty and the fundamental safety and soundness of our financial system independent and professional bank regulatory agencies like the fdic and the office of the comptroller of the currency are one of the strengths of our financial system. prior to my federal service, i served five successive massachusetts governor's as the commonwealth commissioner banca from approximately ten years and served for seven years as a senior stand regulatory official an attorney. my state bank regulatory experience also coincided with the new england banking crisis of the late 1980's and early 1990's. during the period of regional
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atomic disruption and subsequent recovery i gained invaluable experience in perspective. my 25 years of experience state like supervisor has underscored the fundamental importance of the safe and sound banking industry to the economy particularly in the times of stress. it's independently regulated banking system that has both the financial capacity and confidence to extend credits to individuals and businesses. in sum, i believe my public service career has given me in valuable safety and soundness and public protection regulatory experience and judgment to capably serve as the comptroller of the currency if confirmed. it's been the greatest
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professional honor of my life to serve my country during this difficult time. should the senate choose to confirm me i look forward to the opportunity to lead the team at the office of the comptroller of the currency as it serves the individuals, businesses and communities that benefit from a safe, sound and fair national bank system. thank you, chairman johnson and randy member shall be for this opportunity, and i look forward to your question. >> thank you. please begin. >> chairman johnson, a ranking member shall become a distinguished members of the committee, it's my honor to appear before you today, and i am also deeply honored to be president obama's nominee for this position and i'd also like to thank you and your staff for the time you spend with me helping to move my nomination forward. with me today is my wife and my
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partner for 53 years and with the respective families and now serves as the general manager of the smithsonian society as the american history and attorney in washington and a flooring contractor in georgia and worked with the va national heritage program and having been in virginia in, the youngest intelligence analyst for the fbi. and the migrant children 19 of us and i think most of them are here today and if confirmed by the senate i know the constant guidance of this wonderful family will continue to enlighten my thoughts and actions to carry out the duties of the financial the council
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known as fsoc. as stated earlier it was created by dodd-frank will st. reform act to write in a fire risk to the u.s. financial stability of market discipline to the emerging threats fsoc kump west to the service regulators as voting members both mardy and tom would be serving on that as the head of the two agencies. there is no existing service regulator in the insurance field the bill provided for the presidential appointment of his independent person to the expertise in order to ensure that insurance which represents a substantial portion of the united states financial system is appropriate and recognized and accommodated within the new
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framework. i frankly know of no one who could technically qualify as an undeniable expert in all aspects of the highly diversified constantly changing insurance industry as well as the state based regulatory system and its international position. however, if i am confirmed i do believe my half century of experience and insurance would provide fsoc with the insurance perspective that was envisioned by dodd-frank. insurance was in my blood. my grandfather started selling insurance from a mule drawn wagon in 1904 and continued to be a leading insurance producer in princeton and western kentucky for over 50 years. my father started his own general agency in kentucky and ran until he retired until 1973. i was first introduced to the regulatory side of insurance as
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a law student to read in the summer of 1961 at the university of kentucky when i was an intern at the kentucky insurance department. after getting my law degree of 1962 like continue to work as an attorney for the department, became general counsel 1964 and was appointed the commission in 1966. after the completion of my term i practice law with the firm in louisville kentucky until 1972 at which time i became a court appointed three publicly owned life insurance companies that had been seized by the state. the rehabilitation was concluded successfully in 1976 and then on till 1980 and worked as assistant to a family owned insurance company in louisville kentucky. at that time i was selected to become president of the atlanta based insurance trade association in national association of life cos which
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merged in 1993 within the american council of life insurers. following the merger has served as the managing director of the chief counsel on the state relations until my retirement and 99. i then became the council and the atlanta based law firm and was set on that type when 9/11 hate to read and as with many others i know, the terrorist attacks of 9/11 changed the focus of my life and my career to i became an insurance consultant to the congressional research service as it addressed the needs of congress in developing terrorists insurance act. following the passage i was asked by the treasury to assist in the new law to rely continue to serve as the treasury senior insurance policy analyst for eight years monitoring all types of insurance issues and the
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state insurance regulatory system. all of these areas my experience taught me the last two lessons about the various aspects of the insurance. also i believe those experiences qualify me to serve in the position of which i've been nominated. if confirmed by the senate i pledged to work closely with the other members of fsoc to continue expanding my knowledge of, fascination with and passion for the complex world of insurance and the substantial role it plays in our financial system. thank you again for the opportunity to appear before you today. i look forward to answering any questions that you might have. >> thank you, mr. woodall. we will begin the question and answer period. will the court please put five minutes on the clock for members' questions? mr. gruenberg, can you tell us how the new office of the
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financial institutions for the fdic to address the new responsibilities? >> yes, mr. chairman. the irresponsibility that the fdic has under the dodd-frank act is the responsibility for the title ii authorities for the liquidation of the systemic financial companies and in addition we have the responsibility under title i for the resolution plan where the companies will be required to prepare. these are new responsibilities and authorities created under this act, and implementing them in a credible way is a new challenge for the agency and in some sense it is a challenge for any agency of in the financial regulators around the world. and to undertake this responsibility is to indicate we have established a new office of complex financial institutions
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which will have three key responsibilities. first, there will be a group within the office responsible for monitoring the condition of the large systemically significant companies from the standpoint of the resolve ability to be the second, there will be a group responsible for overseeing the development of the resolution plans there will be required of all systemically significant companies under the act as the joint authority that the fdic shares under deval with the federal research, and we are in the process of stifel and the rule for the implementation of the responsibility. those resolutions have to meet the standard of the bankruptcy code. in addition to the plans the institutions will prepare the fdic in addition will be preparing our own plans for the resolution of the companies
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using our title ii authorities. finally come of third group within this office will be a responsible for dealing with a cross border relations with the foreign supervisors for the international operations of these systemic companies. many of them as you know have extensive foreign activities and an effective resolution of the company's we really will require cooperation and coordination across the borders. this is our major challenge. we are in the process of setting the office of and expect it to be fully operational by the end of this year and in some sense from the operational side of our top priority in terms of the implementation of the legislation. >> mr. curry, as comptroller, you will be expected to be independent, exercise independent judgment, and act independently from the treasury
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department. are you prepared to act independently and use your own judgment? >> senator, i believe so. i have a 25 year history of acting independently as a member of the fdic and an independent agency of the united states as the commissioner for the commonwealth of massachusetts. as bank commissioners in particular, your call upon often to make decisions as to the individual institutions and communities. many times those decisions are unpopular. however, i believe in my past history and experience i've demonstrated the independence to fairly and reasonably apply the rules and the laws that govern bank regulation. >> mr. woodall, as it works to complete its rulemaking to
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designate systemically important financial institutions or you will be on this role. how would you report this process and how using insurance companies would be designated? >> as far as the first part there are two other insurance members at fsoc even though they are not voting. one is the director of the federal insurance office that was created by dodd-frank and the other is a state regulator from missouri who represents the state regulators so there are 30 of this would be worked on the insurance issues but the appointed position that i have been nominated for is the only voting member certainly working in the cooperation with the letter to members and all members of fsoc to try to bring
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the insurance perspective. as far as the question of whether they are systemic, i think that has to be done on a case by case basis looking under the hood of each insurance company that may be looked at to see whether or not they are systemic, but i think generally most people agree and i agree that the corps model of insurance products and insurance practices they are likely not to be systemic. however, you don't know that until you see what sort of products, what sort of interconnected this there might be with other insurance companies or on insurance companies or banking institutions, and i think that's why it does have to be done on a case by case basis. >> senate hershel the? >> thank you, mr. chairman. basel iii, the chairman of the
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comptroller as you know play important roles in ensuring the nation's banks called sufficient capital to guard against another financial crisis. recently the committee reached an agreement on the new capital reports for the team to increase capital requirements for large international banks. mr. gruenberg then mr. curry. these were the higher capital requirements for the financial the institution, and what is your assessment of the new basel iii capital courts? will they work and will they be sufficient? >> thank you, senator shelby. we do support the basel iii agreements. in the u.s. delegation to the committee i've participated as the fdic representative of the committee meetings. and i think we view the basel agreement as a step forward to strengthen the capitol in the united states and quite
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importantly, internationally, historic lead the u.s. institutions have generally had higher levels of capital as one of the large foreign financial institutions and the effect of both strengthening the quality and the amount of capital the u.s. standard, and importantly, apply those standards internationally for both the leverage ratio and the risk-based capital standard. so, from both of the domestic standpoint and the international standpoint it seems to us to be a significant step forward. >> mr. curry? >> senator, i would agree with the vice chairman gruenberg that the capitol was incredibly important to the help of the financial system at the fdic. i think that we have a demonstrated position of looking for both higher quality and capital. i would also offer that this past crisis and earlier crises
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have demonstrated that when institutions or the banking system needs capitalism is the hardest to obtain. so having a stronger capital level in place in advance of an economic downturn is critically important. with respect to basel iii, i think it achieves those important goals of the stronger capital on an international basis, and would work to potentially eliminate any unlevel playing field between domestic banking institutions and foreign institutions. >> preemption language, mr. curry? >> there is an ongoing debate whether the dodd-frank act changed the standard to determine the national banks are subject to the state law. the occ and the office of their preemption amendment of dodd-frank have taken a position. the treasury department has disagreed with that view. mr. curry, what are your views
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how the dodd-frank preemption has been interpreted by the occ and the treasury? >> dahlia understand that the actual language of dodd-frank is a matter of controversy between the parties. generally speaking, i think the principle was clear from the constitution that the federal law supersedes conflicting state law and that is an important concept to remember. >> is that what the comptroller makes? are you aware of the position that the treasury department -- >> understand the treasury department did finally public comment on the occ's opposition. i think having a comment on the record is probably the most appropriate way to express those views. alterman. i think it is incumbent upon the occ to maintain its independence
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as a bank regulatory agencies and remain free from any undue influence from any externals horse. >> mr. gruenberg, a report by the government accountability office we call the gao as you know concluded that prompt corrective action has not prevented the sizable losses to the department of the insurance fund. the gao found that lead bank debt under wind prompt corrective actions because of the capitol field since 2008 has produced a loss to the insurance fund. the gao also found that the coming and i quote, the presence and timeliness of the enforcement actions were inconsistent. for example, more than 80 per cent of the banks that failed were on the regulatory watch list that you elude it to earlier for more than a year on average before failing. do you agree with the findings and what steps would you take as
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chairman to improve prompt corrective action and protective deposit insurance funds, would you do differently than we have been doing? >> thank you, senator. i do agree with the findings. i think one of the lessons we have learned from this crisis is the capitol tends to be a lagging indicator and the capitol is the trigger for the corrective action so that during the course of the crisis to the extent it's an early-warning device for the institutions it doesn't prove as effective as we would have liked. i should point out that the pca still prove the importance because it estoppels one institution reach as the critically undercapitalized and local of 2% and provides for certainty in terms of the resolution process which is important. but in terms of an early-warning
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indicator, it hasn't proven as effective as it could have been. i should note that for each institution the fdic has to prepare a report on the crisis of the failure, and we found in reviewing, and these are called material reviews, and conducting these identified three key factors common to the failing institutions. one was rapid growth, number two was the concentration in commercial real-estate and three was reliance on the broker deposits and other volatile deposits. we have asked -- i actually chaired the committee of the fdic, which is overseas. we asked the ig to prepare a set of recommendations for us based on these material reviews s to help prompt the corrective action could be improved and i expect to receive that in the
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near future and would be glad to share the report. >> thank you. >> senator reid? >> thank you, mr. chairman, and mr. gruenberg, geren bernanke earlier a few months ago actually said the federal reserve is committed to limiting on resolution authority of the so-called living will reinstitution delete this summer. what is the fbi says the these schedule? >> we have been working in tandem with the federal reserve. there's been a very cooperative process we we are really near -- we issued a joint rule earlier this year and i think we are near completion of the final rule and we do expect to issue a final rule in august. >> very good. thank you. you are the primary regulator of the community banks and they are vital to our economy and you are
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the ones in the most aggressive lending to the small business and have the best record in terms of the lending to small business and that creates jobs. your view of the impact of dodd-frank on the community banks and community and and many of the provisions of dodd-frank are explicitly excluded across this dynamic contribution to the local economy but can you give me a brief view of where you think this stands? >> yes, senator. >> the fdic is the primary federal regulator of the community banks in the united states. so, we agreed it's fair to say they're the particular responsibility for the future of that important segment of the financial industry. i would note community banks account for about 11% of the
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banking assets in the united states but account for nearly 40% of the business lending by the insurance institutions in the u.s., so they occupy very important financial systems. on balance the come through this episode reasonably well. there have been impacted of the 387 institutions that have field in the course of this episode over 300 of them have institutions with assets over a billion dollars. it's worth noting the even with that, we still of nearly 7,000 community banks in the united states and most of them worked their way through this difficult period in good shape and are in the position now to continue to play the important role. in regards to dodd-frank, i noted accurately that in the provisions applied in the larger
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institutions, the institutions, smaller institutions are excluded, and i would note in particular that the provisions of dodd-frank on balance i think our actually helpful to community banks. the increase in the limit on the insurance for the $250,000 is something the community banks have sought and approved to be during the course of the crisis are a valuable source of attracting liquidity to the banks which prove quite stabilizing. in addition, the act changes the assessment base on which deposit insurance premiums are charged from deposit assets. the consequence of that is actually to shift the burden of funding deposit insurance more to institutions with assets over $100 billion, and for institutions on the assets under
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10 billion they will not truly in the aggregate received a 30% reduction in the deposit insurance premiums under the act. so, it would mean real money for the community thinks it should be helpful to them. so particularly those provisions i think are positive. >> thank you very much. a quick comment. you have served at the state level under a number of governors governor both republicans and democrats, so you have been essentially recognized on both sides now as a professional, and i think that is a quality that we are looking for in the next occ direct counsel. the defector, too, is a thing to bring a valuable perspective to the efforts because a lot of the efforts that have been suggested on the questions involved this
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constant sort of discussion and rebalancing of the lines between appropriate national authority and local state banking regulators and institutions. so i am particularly pleased that you have been nominated and i wish you well, and i also, too, want to join senator shelby who has been one of the most vigorous advocates for the strong capital rules to reinforce his point about the need for the u.s.. we hope, i hope the occ comptroller has significant capital in place. >> thank you, senator. >> since my time is expired and you are going to provide a valuable source of expertise because the world of insurance is not a federal world here in the united states and internationally in particular. i note that in great britain for
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30% of the assets in the financial system are held by insurance companies, not by financial institutions in the united states, so goes looking within the united states and internationally your view is to be extremely important and once again with quickly to come from you and get you on the outside. >> thank you for your service. >> senator corker. >> thank you mr. chairman and all of you for being here today and being willing to serve the way that you have offered yourselves and thank your family for being here. i know you certainly will not receive many tough questions with all these family members in the audience. so we are glad they are here and we are glad to see all of them. i will start with you, mr. vice chairman, soon-to-be chairman. when dodd-frank was being debated and discussed, the previous chairman did an
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outstanding job of convincing the majority of the members of the senate and house to turn you into a separate entity with orderly liquidation of devotees topeka devotees. many of the rating agencies began saying that because they thought too big to fail was going to end, they were thinking about downgrading these institutions. now that if a law is lost and people have interpreted what it really says the institutions in the country are receiving this disproportionately higher ratings and benefits so it's evident most of the world doesn't believe that we have ventured too big to fail and i wondered if there is anything that you were going to come see us about to change orderly liquidation so that people know we are going to end the prospect of any too big to fail.
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estimate a critically important question if i may say. the authorities provide a number title triet title i of wall are sufficient to deal with the issue challenged to us and i think what we are going to have to demonstrate with credibility to the financial markets is the capability to implement in the authority that we have been given and the was the basis of the response that chairman johnson asked earlier. we have to demonstrate capability to close a systemically significant financial company without creating a significant disruption to the financial system as a whole. there is no greater pretty and it doesn't surprise me that much that the market's are taking a show me attitude and simply providing the authority as a
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capability and willingness to carry out the challenge in particular will be to demonstrate both we have the capacity and the willingness to implement it. >> do you think the code ought to be tremendously expanded so people know that unless there are some unusual situations there is a better vehicle for institutions through bankruptcy? >> i think the way the law is structured the premises the bankruptcy code is still the first recourse for dealing with the failure of the financial company. it's only in the circumstances frankly i hope and expect where the determination is made with the effective bankruptcy process could present issues for the system as a whole for which is a final resort for the liquidation authority under title ii.
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it's the last measure to avoid the disruption to the system, and i think it is a -- >> would you be willing to work with us to tie of the liquidation to make sure the large institutions aren't enjoying significant benefits because people believe they are too big to fail and work on streamlining the bankruptcy code so that it would actually work better for this highly complex institutions? thank you. we talked a little in our office i think you are aware that one of the biggest complaints the bankers have across the country is the lack of consistency with examiners in charge and you know it's a problem. so, a big part of your job i think you know this is going to be to get the culture better as a relates to that issue and not criticizing the former chairman we've had the same questions put examiners in charge to make sure that their careers are not
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interrupted by making mistakes are no doubt being overly zealous and creating a prophecy around the country i think you are aware of that and hope you will work to end that. >> i have no higher priority in the community responsibilities and we will work with our examiners to ensure that examinations are done in the house balanced and fairly as possible. >> a few seconds to you, mr. curry. i think we all are concerned about the federal preemption issue and, you know, i know that you were the commissioner for the banking of massachusetts back in 2000 and made a quote i want you to reaffirm this is not where you are but we suggested while the federal preemption itself sometimes have the unintended consequences of the ability to protect consumers and ensure a healthy banking lending industry ministates responded to
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the statute or regulation to protect consumers from predatory practices. however, they're has been the unintended consequence of federal preemption that has made it difficult for states to offer the protection of the consumer's demand. so you will be in the position obviously of making sure we have uniform national standards and yet seem to have in the past indicated that you question that and we want you to a firm you absolutely are going to be independent, you're not going to let the treasury browbeat you into the position and you are denouncing this former position. >> i want to assure you that i will selflessly enforce the national bank act where it relates to the preemption. i think that the dodd-frank provisions actually results some of the issues i was highlighting
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in a statement. there is much more clarity in terms of the rule of states' attorneys general's applicability of the federal wall back to the state consumer financial law, and you also have the creation of thus efp -- csb, so my statement in the past is actually addressed by dodd-frank >> thank you was. mr. woodall bellmon you are apparently universally loved. [laughter] i may have a question for you later. senator menendez? >> thank you mr. chairman. let me in this atmosphere we are in what may strike a bipartisan note with senator corker and say to you senator corker the
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observation about community banks and banks in general, we are sitting on the committee saying to those institutions particularly that we helped save in 2008 we would like to see you when it and listen to voices that say everything you want us to do we're being told different by examiners so the question is how to strike the pendulum and the right way and i'm talking about speculative lending obviously for those that had to cast the votes to change the course of 2008 we don't want to see that again by the same token many of us have the observations the pendulum has swung so far that we are creating a crisis in terms of getting access to capital and moving this marketplace creating an economy that can thrive again. without the access to capital is not going to happen again. if i listened to one bank president or board of directors after another, i get a common thread and i don't always believe it's contrived.
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so i hope we've performing assets asked to be recapitalized and areas of landings saying don't do it. so, i understand there were some who were not caught on the beat when they need to be. but that doesn't make him now, you know, the total opposite. so, i'd like to hear how direct this balance of the pendulum's we can get this economy moving again. >> thank you, senator, that is one of the key questions. the fdic has six regional offices around the country. over the course of this year, had the opportunity to visit each of the regional offices, and in each office i met with a group of our examiners with senior management present except one meeting where the senior manager kind of snuck in and. it was without the management
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present to trade at here to see what they were seeing in terms of the institutions they were examining. i will tell you what we tried to communicate to them was the need for balanced and to work with the institutions to enable them to the maximum extent they can to carry out the basic mission extended in the credit to the credit worthy borrowers. i will tell you for what it's worth it is my sense most of our examiners are career professionals. we try to carry out the job in a balanced way. i have no doubt that there is some that deutsch to far, go overboard. most are trying to do their best in a difficult environment. what i will say to you is that we are staying in close touch. people often have disconnect between the policymakers in washington and the examiners in
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the field. we will do our best to maintain or see that that can be followed through to stay in close touch with examiners and encourage them to exercise discretion to allow the institutions to carry out their basic purpose. it is one of my top priorities. >> let me ask both of you, you and your self. i'm concerned that it's the qualified residential mortgage definition being worked out by regulators and brought enough it could hurt the housing market that is already suffering enormously in terms of being part of the national nec economic recovery especially as you receive the higher down payments of 20% or more can you comment on that? >> i'd be happy to, senator. i think we are in the process of the fdic with the other federal bank regulatory agencies of reviewing the common letters, the numerous letters on both the
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retention proposal and its qualified provisions. the issues that you have raised of whether or not we are appropriately the proposal appropriately excludes a large number of american families and households from home ownership is an issue that we are looking at carefully and might float the consequences to those families and individuals as well as our economy. >> as you know, the agency going forward with a notice of proposed rulemaking on this issue when the fdic board approved the noticed making i commented that time that we have to strike a balance between trying to address the problems made in the crisis in terms of
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securitizations and proper underwriting of mortgages with access to mortgage creditworthy borrowers. that is the challenge extended in the comment period we expect to get additional comment and i think we understand the close review of this is going to be necessary. >> we will be looking with great interest. finally mr. curry, i won't go through all the specifics but we have said along with ten of our colleagues and house colleagues as well as to other agencies the issue of alleged reports on the mortgage modifications that suggest that the continued practice of assigning continues to be a reality. and which is not acceptable. not acceptable under the law. it should not be acceptable for the regulatory agencies. we are being told -- we've been told by the regulatory agencies that that practice has ended and
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it has not. so my question is, the question i just put before all of you who have jurisdiction in the field is will you disclose the results of the foreclosure review on a bank by bank basis including the letters of engagement for the independent consultants performing those reviews and the action plan by the mortgage servicers? i have to be the -- i know there's a claim for the proprietary reality in the congressional research service has said that in fact it can be released in the public interest there has to be medium by which you can assure those of us who are both policy makers as well as the public that this has ended. >> senator, i think the signing markets for closure issue is extremely important and affects both individuals, families, the banking industry and the overall
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finance industry. i think it's critically important that we work to restore the credibility to that system. i think that the framework that's under the cease-and-desist order that was issued by the occ and the other federal regulatory agencies were an important first step to try to restore that credibility. i think as well the greater transparency the agency can show on how the failure in that system are being corrected and individuals who have been harmed will fight redresses critically important, and i think the agencies and the occ in a particular if i were confirmed work to be as transparent as possible, consistent with any governing supervisor or legal restriction. >> we look forward to that. >> thank you, mr. chairman.
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>> mr. chairman, thank you. mr. gruenberg, mr. woodall, thank you for your service. and for your interest in providing additional leadership. mr. woodall, you seem to have avoided any kind of a serious conversation. i only have to suggest you must be a good person because you're grandchildren are so well-behaved. [laughter] congratulations. i want to focus my attention on community banks as has been at least in conversation today a topic of conversation. you indicate in your testimony the primary federal regulator majority of the community banks fdic cares a particular responsibility for the crucial submit of our financial industry. i have a genuine concern that the community banks are on the verge of becoming a thing of the past. and in large part, i believe that because of the increasing
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regulatory burden that is being placed upon those banks. i don't know whether you would know a number, but i would be interested in knowing what percentage of the regulatory cost is in comparison to assets or loans, deposits as compared to a larger financial institutions, but in my view, and kansas has lots of community banks, they are the ones as you outlined making loans to small business and farmers and ranchers it's a different kind of environment if you are asking seeking a loan at a community bank and you are some place in a larger city with a larger financial institutions those relationships are important in the states like mine, and i've had this conversation with every regulator in this room and i would admit you have been in this room longer than i have, but i've had this conversation at every opportunity and i always get the same answer which
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is we take special consideration and account for the community banks. we understand their importance, but there is virtually no end to the concern or criticism raised by the commercial banks about the regulatory environment in which they are in and the amount of money that is being spent to comply with the additional staff that is necessary, and would be one thing if the community banks were not succeeded because they no longer serve the purpose but that is not the case. in my view, the demise, the number of community banks is much more related to the environment of which they are finding themselves having to work. one of four larger banks in our state, the ceo told me this year of the community banks for the first time in history are calling the large bank asking are you at all interested in buying us, it is no longer in the fund. the regulatory environment and the cost that we encountered no
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longer make this a profitable venture. so, you see the continued consolidation, the numbers are out there. pfc were community banks as a result of some of the foreclosures that occurred and it is because they are consolidating with other banks in order to spread the regulatory cost among assets and loans. and so, while i appreciate your reassurance and it is somewhat like you said about the too big to fail in response to mr. corker, we are waiting for the evidence that something is different in regards to those community banks. and so, in particular, i want to -- i certainly agree with you that the fdic insurance industry you raised a rating that positive to foment, but let me particularly raise a few the disparate treatment of capital standards between community banks and large financial institutions. the definition of well-capitalized seems to have a
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different definition in regards to whether or not you are a large or small bank and many of our community banks are being read to the did which they are required to have a much higher percentage of capital than the smaller banks i'm sorry, the larger banks many of which are under other regulatory restrictions as a result of the financial condition. so my point is there is a double standard in my view between the capitol requirement that the small community banks are required to have come and that larger financial and institutions's across the country including on wall street. so my question is will you continue to hire the levels for the too small to save community banks and i don't want to say that, until a double standard
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compared to the wall street financial institutions? >> let me try to respond to that. it's my understanding that it's a matter of the rules that apply they are the same across-the-board. it's fair to say that community banks as a general matter actually have high your capital for the institutions. i think from my own perspective, we have the important authority to impose the enhanced requirements on our largest systemically important institutions for precisely the point that you make. they do derive an implicit benefit and in a certain extent, the capitol requirements have not fully reflected those benefits, and that approach is
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reflected in the basel iii that senator shelby asked about earlier and in addition the provision to impose the additional surcharge on the largest institutions as authorities under the dodd-frank act there's a new international agreement to impose a particular additional level of capital on the largest banks in an effort to both of them account the systemic risks of repose and to bring about some greater leveling of the playing field of the smaller institutions. i agree with you that has not been level. we should make efforts to bring a greater balance to. one of the things we can do under the new law which is important in addition to the capital above requirement is to develop the capacity to please the large institutions and to
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the receivership because until you can do that but also contributes to the advantage they have. on that and the fdic carries the responsibility with regards to the large institutions and as united and i noted earlier we have the responsibility for the small institutions. >> there's a belief that there is an attitude of the fdic that small banks are more difficult to regulate, takes more assets in the sense that the fdic doesn't believe in management skills and capabilities are there, so i assume in this setting you are going to tell me that is not the case, but i would reaffirm what i continually hear about the belief that the fdic has i wouldn't say a policy but an approach that says it would be a lot easier -- a lot better for the economy if there were fewer financial institutions. for the economy of kansas, that wouldn't be the case.
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>> i appreciate you raising that point. you are right. in my view we don't have that attitude towards the community banks. we think they are quite different in operation in a positive way from the large institutions and their business model with anything has been validated during the course of the crisis they stay close to their customers and rely on the deposits and generally are a source of stability during difficult times and served a function that's quite unique and important for small business and towns that otherwise might not have access to the financial services. we have an advisory committee made up of 14 community banks around the c

Capital News Today
CSPAN July 26, 2011 11:00pm-2:00am EDT

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TOPIC FREQUENCY Mr. Olsen 28, Us 23, United States 23, Nctc 18, Yemen 17, U.s. 14, Fdic 12, Mr. Woodall 8, Mr. Curry 8, Shelby 7, Conrad 7, Mr. Gruenberg 7, Pakistan 7, Afghanistan 6, Johnson 6, Basel 5, Washington 5, Fbi 5, Uighurs 5, Matt Olsen 5
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